1) First Resources (bought 17 April 2008))
Long
Entry price 1.03
30 day ATR 0.09
1.5X ATR30 0.135
Cut loss stop on 1.5ATR30 0.895
Recommended cut loss 0.885
Loss on recommended cut loss -1517.878899
Target price 1.38
Profit on target price 3414.575381
Reward/risk ratio 2.249570361
The Board of Directors of First Resources Limited ("the Company") are pleased to announce that at the Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”) of the Company held on 29 April 2008, all resolutions relating to matters set out in the Notices of the AGM and EGM were duly passed.
So the share buy back mandate resolution in the EGM was also passed. So far there have been no announcements from First Resources about any share buy back action. However I suspect that with this resolution in place the stock may have some support.
Many market watchers are talking about the rise in the USD$ and also the retreat in oil prices as well as commodities. Most are waiting to dump their commodity based investments.
Personally I do not see a crash in commodities going forward. A correction might be in place at the moment but as long as macroeconomic conditions remain the way they are with the US in a mild or no recession, China still growing at around 10% and no global widespread economic downturn, then the demand for commodities will remain high. A rising USD$ might slow the rate of increase for commodity prices but probably not cause a crash in prices.
Shorter term however I expect to see the USD$ to pullback along with the US stock markets. Oil will once again have another rally when that happens.
First Resources was never really a Technical Analysis play. My considerations for buying a commodity counter was based on fundamentals of economic outlook, supply and demand. I agree with Jim Rogers.
I did however choose to buy First Resources over GoldenAgri, and Indoagri based on the chart. Also the entry price was based on what I thought might be a breakout at that time.
My exit levels will also be based on the chart. But frankly from the macroeconomics I am quite confident I will make a good profit on this stock perhaps later this month.
The 25 day moving average has been flat for a while. The support appears to be at 0.96. A break below the 25 MA would put us looking at the 0.88 support level.RSI is still in uptrend but looks like it may break below in the coming week. Hard to say at this stage. Interestingly I wonder when is First Resources announcing their 1Q 2008 results? That may be a catalyst for a move up as well.
If we look at the SMA/EMA crossover trend change indicator there is some suggestion that the trend might be changing for First Resources since the big selldown when they had the scandal court case.Personally I still think First Resources is trading at a discount compared to its peers in the palm oil industry due to that sell off in the scandal.
Macquarie Research had a 32 page report on First Resources released on 25 April 2008 and it looks like First Resources is still a good business overall to invest in. Below is the summary of their recommendation :
Outperform with a target price of S$1.60 We initiate coverage of First Resources (FR SP, Mkt cap: US$1bn), a pure upstream palm oil play, with an Outperform rating. Our DCF-based target price is S$1.60 (using WACC of 13.1%), representing 58% potential upside. This implies a forward FY08E PER of 16x. The shares are trading at an attractive 10x FY08E PER and 8x FY09E, with Indo plantation plays at an average 9x FY09E PER, and a huge disparity compared with the Malaysian plantation plays’ average at 15x FY09E PER.
Last done closing price = $1
Unrealised loss = -$382
2) COSCO
Long
Entry price 2.84
30 day ATR 0.24
1.5X ATR30 0.36
Cut loss stop on 1.5ATR30 2.48
Recommended cut loss 2.78
Loss on recommended cut loss -159.8411916
Target price 3.2
Profit on target price 677.1813528
Reward/risk ratio 4.236588491
Sold on 28 April 2008
Profit = $929
I sold COSCO on Monday 28 April 2008 when it hit my trailing stop of 3.34. Realized a profit of $929.
COSCO was sold off in anticipation of bad earnings for 1Q 2008. It was hard for me to understand or believe that the earnings would be poor looking at Yangzijiang's good earnings that came out on the same day.
However COSCO was indeed sold off quite severely once again because I believe shortists got into the action.
I decided to take a punt however and bought COSCO back at 3.11 on 29 April 2008, the day before the 1Q 2008 earnings were to be released.
I have posted an entry on COSCO after the results were announced. At the moment my stop for COSCO is 3.29.
From the chart
The 25 and 50 day moving averages look like they might cross soon. This would be the first crossover since the last one in Dec 2007. If so the crossover necktie might form a solid support level for the stock. I suspect it may be the 3.40 level. For this to happen we need COSCO to move up above 3.40 in the coming week and have a strong close above 3.40.I am betting that this will happen and COSCO will move higher than that. However in line with overall markets I do see a pullback coming. And 3.40 may be a good entry point for this stock during that pullback.
There are several possible catalysts going ahead for this stock, in particular possible announcement of the 9 new vessels ordered by China COSCO Holdings Ltd (awaiting deposits) and an increase in stake in COSCO Shipyard Group Ltd from 51% currently to 80%.
Looking at the SMA/EMA trend change indicator, once again COSCO is attempting a trend change after the failed one in early April 2008. Will it be 2nd time lucky? We shall see.
| Long (29 April 2008) | |
| Entry price | 3.11 |
| 30 day ATR | 0.22 |
| 1.5X ATR30 | 0.33 |
| Cut loss stop on 1.5ATR30 | 2.78 |
| Recommended cut loss | 0.355 |
| Loss on recommended cut loss | -701.7552702 |
| Target price | 3.92 |
| Profit on target price | 1570.163065 |
| Reward/risk ratio | 2.237479548 |
Last done closing price = $3.37
Unrealised profit = $467
Total trade summary:
Up to date realized profit/loss = $1313 + $929 = $2242
Unrealized profit/loss = $467 - $382 = $85
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